US Trade Deficit Rises to $56.6 Billion, Highest Since 2008

(CN) — The U.S. trade deficit rose to $56.6 billion in January — the highest level since October 2008, the Commerce Department said Wednesday.

The nation’s trade deficit, defined as the gap between what America sells and what it buys abroad, has now risen for five straight months.

President Trump has repeatedly claimed that the United States’ persistent trade deficits are due to the abusive practices of U.S. trading partners and bad trade deals signs by past administrations going back to the 1990s.

In response, he’s slapped big new tariffs on solar panels and washing machines and says he’s about to do the same on imported steel and aluminum.

White House spokeswoman Sarah Huckabee Sanders said an announcement on the latter could come as soon as Friday.

Europe has threatened to retaliate with sanctions on U.S. exports of blue jeans, bourbon and Harley-Davidson motorcycles, raising the risk of a potentially destructive trade war.

Meanwhile, two members of President Donald Trump’s Cabinet suggested Wednesday that Canada and Mexico might escape new tariffs on steel and aluminum, a potential bargaining chip in North American trade talks that heeds the ‘surgical approach” advocated by House Speaker Paul Ryan.

“The president indicated that if we can work something out with Canada and Mexico they will be exempted. It’s not inconceivable that others could be exempted on a similar basis,” Commerce Secretary Wilbur Ross told reporters. He said earlier on CNBC that the president has “indicated a degree of flexibility.”

Treasury Secretary Steven Mnuchin said the administration was “definitely going to end up” with the across-the-board tariffs Trump is seeking — 25 percent on steel imports, 10 percent on aluminum. “But, again, there will be a mechanism where, to the extent that the president wants to give waivers, the president can do that,” Mnuchin told Fox Business.

According to Wednesday’s report, exports fell 1.3 percent to $200.9 billion in January, and imports were flat at $257.5 billion.

The United States ran a $76.5 billion deficit in the trade of goods, which was partially offset by a $19.9 billion surplus in services such as education and banking.

The $36 billion January deficit with China was the highest since September 2015. The trade gap with Mexico narrowed to $4.1 billion from $5.4 billion in December.